Speaker 1: This is Bloomberg Business Week. I'm Carol Masser and I'm
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Speaker 1: Search Bloomberg Global News. Well a lot of virus headlines
Speaker 1: to catch up off on this Monday afternoon. The big
Speaker 1: news today, though, the CDC issuing it's long awaited guidance
Speaker 1: for what fully vaccinated people can do. They say that
Speaker 1: fully vaccinated people can visit indoors without masks, but still
Speaker 1: must wear them in public and avoid large gatherings went
Speaker 1: around those who aren't immunized or who are at high
Speaker 1: risk for contracting COVID nineteen. Dr Rochelle Willinsky of the
Speaker 1: CDC made the announcement earlier today. Fully vaccinated people can
Speaker 1: visit with other fully vaccinated people in small gatherings indoors,
Speaker 1: without wearing masks or physical distancing. Remember here we are
Speaker 1: talking about private settings where everyone is vaccinated. Private settings
Speaker 1: where everybody is vaccinated that long awaiting guidance. Again, that's
Speaker 1: Dr Michelle Willinsky of the CDC with those comments earlier today.
Speaker 1: Joining us now from Seattle is Dr Joeanne Roberts, chief
Speaker 1: Value Officer at Providence St. Joseph Health. Dr Roberts, thanks
Speaker 1: so much for joining us on this these this guidance
Speaker 1: from the c d C. What was your reaction as
Speaker 1: a doctor when you heard this earlier today. It's good
Speaker 1: to be with you, Tim, and thanks so much. I
Speaker 1: was really excited and I thought the CDC is recommendation
Speaker 1: made a lot of sense. And it's a real, real
Speaker 1: gift to families, especially because I think uh grandparents have
Speaker 1: been separated from their rand kids and this will be
Speaker 1: an opportunity for them to get together for the first
Speaker 1: time in a year. Some people may be saying to themselves, though,
Speaker 1: no more avoiding the in laws right. Perhaps so no,
Speaker 1: but it's a big step forward. Dr Roberts, um, but
Speaker 1: again the caveat these are people who have been vaccinated, like,
Speaker 1: we need to remember that they're still and I think
Speaker 1: Dr Lensky kind of laid this out to that there
Speaker 1: are still risks out there because the numbers haven't come
Speaker 1: down as quickly as everybody had hoped. No, and they
Speaker 1: have plateaued, Carol, and that that is concerning and we'll
Speaker 1: see how that plays out in the next few weeks.
Speaker 1: But I think her her comments about vaccinated people in
Speaker 1: small gatherings at private settings with vaccinated people and then
Speaker 1: also vaccinated folks who are with low risk folks. So
Speaker 1: and again that's that's the typical grandparent grandchild kind of
Speaker 1: relationship where the kids might not be vaccinated, but they're
Speaker 1: not at high risk of getting terribly sick, so they
Speaker 1: feel that that's a fairly fairly safe environment as well.
Speaker 1: You know, Dr, when I heard this from Dr Willnsky
Speaker 1: earlier today, I thought, this is just a huge win
Speaker 1: for messaging around the vaccine, because what it does is
Speaker 1: it shows you that the CDC is finally now saying
Speaker 1: you can act differently after getting this this this life
Speaker 1: saving medicine. Yes, I I agree, and I welcome also
Speaker 1: Dr Willnsky's leadership in this. I think historically the medical
Speaker 1: community has looked to the CDC as a voice of
Speaker 1: science and reasonable policy, and I think we're hearing that
Speaker 1: from the CBC. Now. Dr Roberts want to ask you.
Speaker 1: You guys have been really kind to us here at Bloomberg,
Speaker 1: and we have been talking to you for over a year. UM,
Speaker 1: as we've all been dealing with the pandemic. You guys
Speaker 1: were ground zero. You're one of the largest health care
Speaker 1: systems in the US massive fifty one hospitals, seven states. Uh. Massive,
Speaker 1: But the first case of COVID was within your hospital system.
Speaker 1: So here we are a year later. Are are we
Speaker 1: where you thought we would be? And what gives you hope?
Speaker 1: What gives you frustrations or nervousness as we move forward? Oh?
Speaker 1: What a great question. I you know, I, Carol, We're
Speaker 1: actually in a better place than I expected. UM. I think,
Speaker 1: especially with this release of the most recent vaccine, with
Speaker 1: Johnson and Johnson vaccine, I really think that we will
Speaker 1: see something close to normalcy six months sooner than I
Speaker 1: than I would have expected six months ago, for example.
Speaker 1: So Um, as bad as things have been and we're
Speaker 1: not out of the woods yet, I think the future
Speaker 1: is looking brighter. Um, than I would have thought a
Speaker 1: few months ago. When you say normal, quote unquote normal,
Speaker 1: as we like to say, Um, we've heard different things.
Speaker 1: We've heard October, November, we've heard maybe summer. What's what's
Speaker 1: your time frame in terms of society feeling a lot
Speaker 1: more normal? Well, I think you know, I'm not sure
Speaker 1: we'll ever go back to what we used to call normal.
Speaker 1: I mean, I think a mask is going to be
Speaker 1: part of my wardrobe for the law to future. I mean,
Speaker 1: I I frankly, I don't think I'll be getting on
Speaker 1: an airplane even two years from now without a mask. Um.
Speaker 1: And that's okay. I mean, that's a small price to
Speaker 1: pay to stay healthy. Um. But I think we'll be
Speaker 1: seeing slowly larger and larger gatherings my guests, especially with
Speaker 1: this most recent report in with CDC. My guess is
Speaker 1: it by fall, schools will be meeting in person most
Speaker 1: in most of the country. But I think, um, as
Speaker 1: the Biden administration has said, if we can get these
Speaker 1: vaccines out by this summer, which is looking likelier, I
Speaker 1: think we'll all be able to gather again. By Can
Speaker 1: I go to a concert anytime soon with thousands of
Speaker 1: people just got about thirty seconds here. I wouldn't be
Speaker 1: going this spring, but you know, you might start looking
Speaker 1: at take up for the ball, maybe wearing a mask, Carol, maybe,
Speaker 1: probably always Dr Roberts, I want to ask you. It
Speaker 1: is International Women's Day, and I just think, here we
Speaker 1: are still talking about women, you know, having the same
Speaker 1: opportunities as men. It's gotten better. It's certainly different than
Speaker 1: it was from my mom or my older sisters. And
Speaker 1: it was for me and it will be for my
Speaker 1: daughter who's a teenager. But I do wonder, as a
Speaker 1: woman coming up in medicine, what was the toughest thing
Speaker 1: you ever faced? Oh, my gosh, there a list, honestly, Oh,
Speaker 1: there's a there is a list. And uh, you know,
Speaker 1: by the time I came to medicine, Carol, Uh, more
Speaker 1: than half of my medical school quests were women. So
Speaker 1: I think, um, women were part of the mainstream of learners,
Speaker 1: but they still weren't in the mainstream of leaders and
Speaker 1: in academics. I know that it's still true. Uh, there's
Speaker 1: lots of articles written about it. I will say I
Speaker 1: just heard in our organization this morning of our senior
Speaker 1: leaders at Providence are women, which makes me very proud
Speaker 1: to work for an organization that recognizes that women can
Speaker 1: and should step up to leadership. I'm wondering about we
Speaker 1: have heard so much about during the pandemic, how this
Speaker 1: has disproportionately affected women. Um, we've heard of women dropping
Speaker 1: out of the workforce. Are you seeing that in healthcare
Speaker 1: at all right now? I mean we know about burnout
Speaker 1: when it comes to doctors and healthcare professionals, especially over
Speaker 1: the last year. They have just worked so hard. What
Speaker 1: are you seeing? What we're seeing is you're right, burnout
Speaker 1: is that all time high? We have not seen an
Speaker 1: exit from the workplace, but we are worried about it
Speaker 1: because once things come down, I mean, healthcare workers will
Speaker 1: respond to a crisis like like all public servants. They
Speaker 1: will step up in a crisis. Our worry is that
Speaker 1: folks are so tired and so burned out that once
Speaker 1: the crisis is a little bit further along and it's past,
Speaker 1: that we'll see people leaving the healthcare field. Um. And
Speaker 1: we're working hard to prevent that as things get better. Wow,
Speaker 1: that's worrisome. It is worksome. Yeah, what has to change
Speaker 1: to prevent that? We've already seen? I mean, haven't we
Speaker 1: already seen some big changes to the way doctors and
Speaker 1: medical students will spend their early years. The hours have
Speaker 1: shifted in recent years, right to make it less taxing.
Speaker 1: Am I correct in thinking that the hours in training
Speaker 1: have changed, but the hours in practice haven't changed. And uh,
Speaker 1: and we need to recognize that as tell tell a
Speaker 1: health becomes more common, that may be a way to
Speaker 1: reduce the workload on positions in their suits. Um, we're
Speaker 1: just going to have to continue to experiment and try
Speaker 1: things out. It comes down to putting our caregivers in
Speaker 1: the center of everything we do. What we when we
Speaker 1: find that we serve our caregivers first and foremost, they
Speaker 1: will serve their patients first and foremost, and they'll take
Speaker 1: care of the better. You know. I came across some
Speaker 1: stats kind of getting ready for our chat with you,
Speaker 1: and women represented close to the global healthcare workforce in
Speaker 1: so a few years back, almost half of all doctors
Speaker 1: in the O E C D countries where women. So
Speaker 1: we definitely have seen a lot of progress when it
Speaker 1: comes to management, like you mentioned your organization, But in
Speaker 1: general is that the case? In general, that is not
Speaker 1: the case. It's better across the board. Uh, The area
Speaker 1: that I'm most concerned about is in the academic world,
Speaker 1: where where our young people are learning how to become
Speaker 1: doctors and nurses. We want the academic world to recollect
Speaker 1: the greater population, so more than half of when more
Speaker 1: than half of medical students are women, I would like
Speaker 1: to see the time when more than half of our
Speaker 1: senior faculty or women. It is so it is so
Speaker 1: interesting to be talking about burnout at the same time
Speaker 1: as seeing the headlines UM that a record number of
Speaker 1: medicals of students are applying to Meta School Medical School
Speaker 1: because they've been inspired by what has happened over the
Speaker 1: last year. And we only have about twenty seconds left.
Speaker 1: It's the most honorable thing I could imagine doing. So
Speaker 1: you're asking the biased observer, Yeah, well, we appreciate it
Speaker 1: as always. Dr Joey and Roberts, thank you, Chief Value Officer,
Speaker 1: Providence St. Joseph's Health, massive healthcare system out there on
Speaker 1: the West Coast and actually throughout seven states UH in
Speaker 1: the United States, joining us once again on the phone
Speaker 1: from Seattle. UM. Good to hear perspective though in terms
Speaker 1: of one year later. And I also love hearing the
Speaker 1: optimism right just so optimistic about about where we are now.
Speaker 1: This is Bloomberg Business Week with Carol Messer and Bloomberg
Speaker 1: Quick Takes Tim Stinovic Bloomberg Radio. Carol, is strange thing
Speaker 1: happened in and I talked talked about this quite a bit.
Speaker 1: Despite the fact that the US economy saw the deepest
Speaker 1: recession since World War Two, millions of people lost their jobs,
Speaker 1: state finances in general, we're actually okay, like, what's up
Speaker 1: with that? Yeah? So, for example, Texas faced a four
Speaker 1: point six billion dollar budget shortfall last July, and now
Speaker 1: it's just a fraction of that. This build on that
Speaker 1: story we talked about last week, right, why are the
Speaker 1: States in a tougher place? And this one provides a
Speaker 1: little bit of another piece to that puzzle. Joining us
Speaker 1: now from the from the student, well not the studios,
Speaker 1: but a studio here in the middle around the bend,
Speaker 1: yea maybe down the staircase Bloomberg Headquarters. Is Danielle Moran
Speaker 1: Muni Bond reporter for Bloomberg News. Her story is in
Speaker 1: the current issue of Bloomberg Business Weekend. It is all
Speaker 1: about a Supreme Court case a few years ago that
Speaker 1: arrived just in time for the pandemic. Hey Danielle, Hi, guys,
Speaker 1: how are you so? Tell I'm good. Tell us a
Speaker 1: little bit about what happened between Wayfair and one of
Speaker 1: the Dakotas. Yes. So, for years before the pandemics, state
Speaker 1: and cities were worried about losing on one of their
Speaker 1: major sources of revenue, which is sales taxes. As brick
Speaker 1: and mortar retail shifted online, people stopped going to malls,
Speaker 1: stopped going to stores, they started buying stuff through their computers.
Speaker 1: And that debate really came to a head in with
Speaker 1: the Supreme Court case that decided Um South Dakota versus Wayfair,
Speaker 1: the furniture diet. Um that South Dakota passed the law
Speaker 1: that allowed them to collect sales taxes on purchases from
Speaker 1: companies that didn't have a physical presence there um, and
Speaker 1: the Supreme Court upheld the decision saying that they were
Speaker 1: permitted to collect these taxes. And that really was a
Speaker 1: like for two disdecision coming two years before the pandemic
Speaker 1: went almost all shopping shifted online. Talk about timing well,
Speaker 1: listen like as a consumer right for such a long time,
Speaker 1: so I know when we would shop to you would
Speaker 1: find a place that didn't ar sales tax, especially on
Speaker 1: like large items, if they didn't have a store, and
Speaker 1: you would. I'm guilty of that. I did it in
Speaker 1: the past, even before that. People in Manhattan would go
Speaker 1: to New Jersey two years ago to do this right
Speaker 1: and still do you know? You see that? So listen,
Speaker 1: So what a windfall for for UM the states? Tim
Speaker 1: was talking about some of them, whether it was Texas specifically.
Speaker 1: I mean, we're talking about real money, Danielle, Yes, we are.
Speaker 1: And and so for example, California is the world fifth
Speaker 1: largest economy. They reported that online tactical sales more than
Speaker 1: tripled in the first half of compared to a year earlier.
Speaker 1: New York reported a dramatic shift in consumer spending as
Speaker 1: people UM started shopping online more during lockdown. And this
Speaker 1: really bolstered text collection UM and really lead to a
Speaker 1: UM a happy I guess collection for states that we're
Speaker 1: going through some really tough times, Danielle. I have to say,
Speaker 1: reading your story it made me think too that you know,
Speaker 1: whenever we talk about increases in taxes or tax policy,
Speaker 1: everybody's like, I don't I don't want to pay more taxes.
Speaker 1: But in some ways this was a way of easily
Speaker 1: increasing revenues, helping out states, providing another revenue stream and
Speaker 1: kind of shared among the public. Right, So this was
Speaker 1: a The way that the Texas controller described this to
Speaker 1: me is for him, this was an issue of fairness.
Speaker 1: This is saying that you can if you have to
Speaker 1: walk down the street and you can go to your
Speaker 1: local store and you have to pay sales taxes there,
Speaker 1: why don't you have to pay them online? Um? And
Speaker 1: And that was sort of a core issue for him.
Speaker 1: And then as states started implementing these laws allowing them
Speaker 1: to collect from remote sellers, they also implemented laws allowing
Speaker 1: to connect from collect from these marketplace aggregators which are
Speaker 1: UM like etc. And eBay, places where businesses can sell
Speaker 1: products to consumers. But also liked it. But what I
Speaker 1: did learn in your story too, was that not every
Speaker 1: state has been able to do this. Uh, Florida and
Speaker 1: Missouri are among the forty five states that levy sales
Speaker 1: taxes have who have not moved to collect those dollars yet.
Speaker 1: Does does that mean that they missed out on this completely?
Speaker 1: They're working on it, though, are they They're working on it,
Speaker 1: but they have bills making their way through the state legislature. UM,
Speaker 1: but experts that I have talked to say that they
Speaker 1: may have left money on the table for not implementing
Speaker 1: something a little bit sooner, given this really acceleration in
Speaker 1: the e commerce space of the pandemic sort of forced
Speaker 1: on consumers. But I think it's just such an interesting
Speaker 1: way when you think about the tax base, right, and
Speaker 1: we think about federal taxes allocating to different states and
Speaker 1: so and so forth, I mean, here's a way of
Speaker 1: really helping out states and municipalities. Danielle, Yes, So this
Speaker 1: was um the ability to collect these online sales taxes
Speaker 1: really helped mitigate some of the fiscal fallout that states
Speaker 1: and cities were feeling the pandemic, and they were um
Speaker 1: seeing revenues fall in other areas. So you have hotel taxes.
Speaker 1: People aren't traveling, they're they're not staying in hote hells.
Speaker 1: So that was an area in almost all states that
Speaker 1: saw decline. And this, although not a panathea for states,
Speaker 1: really helped sort of cushion the blow um in in
Speaker 1: other revenue areas. Now, I know that states don't break
Speaker 1: out all the types of tax revenue that they get,
Speaker 1: so we don't necessarily know in every single case what
Speaker 1: portion came from online sales and this quote unquote new
Speaker 1: tax um. But in general, do we know from the
Speaker 1: analysts you spoke to, from the reporting that you did,
Speaker 1: just how much it helped in so um from the
Speaker 1: experts I spoke with that this Wayfair decision could not
Speaker 1: have committed better time for states and local governments. If
Speaker 1: you look at Texas, for example, they gained over one
Speaker 1: billion dollars in the first twelve months of collections and
Speaker 1: half a billion since they started collections just for local
Speaker 1: local governments. That is a significant number, even for a
Speaker 1: state as biggest Texas that was going through some pretty
Speaker 1: difficult financial expectations earlier this year. I guess the days
Speaker 1: of finding those tax free, don't you remember? Did I
Speaker 1: totally remember? And I remember when this decision came down.
Speaker 1: It was a bit. It was a big one. It's
Speaker 1: a big fight for It was a big fight. And
Speaker 1: the funny thing is is we're talking about Wayfair here.
Speaker 1: But it was a big deal for Amazon too huge,
Speaker 1: Not as much now because they have they have distribution
Speaker 1: and like a physical presence in so many places, but
Speaker 1: it was huge. But I remember having conversations we're buying
Speaker 1: something at home, like, yeah, but you gotta you know,
Speaker 1: you gotta pay sales tax. Let's look somewhere else. We
Speaker 1: can't do that anymore, Danielle, great piece of reporting. I
Speaker 1: really appreciate it. Danielle Moran, MEETI Bomb reporter at Bloomberg News.
Speaker 1: Her story, by the way, in the current issue of
Speaker 1: Bloomberg Business Week magazine. It is on newsstands, online and
Speaker 1: on the Bloomberg terminal. You're listening to Bloomberg Business Week
Speaker 1: with Carol Messer and Bloomberg Quick Takes Tim Stinovik on
Speaker 1: Bloomberg Radio. So this is Bloomberg Business Week and our
Speaker 1: next guest. The company that she works for, State Lauder.
Speaker 1: It's a behemoth when it comes to cosmetics, skincare, Khan,
Speaker 1: you know who they are, Fragrance, it's one of the
Speaker 1: lord just in the world. They own a portfolio brand,
Speaker 1: some created internally, many others like Lamaire, Bobby Brown, glam Globe,
Speaker 1: Mac and others they've been acquired. They really have their
Speaker 1: pulse on the consumer, especially when it comes to this space.
Speaker 1: Joining us right now is Tracy Travis, Executive Vice President
Speaker 1: Finance CFO of s day Lauder and she is with
Speaker 1: us on the phone in New York City, Tracy. Great
Speaker 1: to have you here with Tim and myself. Do we
Speaker 1: have her? Okay? Good? Good? Yes, we can uh listen.
Speaker 1: Great to have you here. And there's so much to
Speaker 1: talk about. And we're very interested in your new Equity
Speaker 1: and Engagement Center for Excellence. And I want to get
Speaker 1: into the programs you guys have in just a moment.
Speaker 1: But I'd love to get your thoughts on today's environment.
Speaker 1: I mean S. D. Lauder is a global brand, so
Speaker 1: well known, you sell in some hundred and fifty countries.
Speaker 1: How would you describe today's global market environment right now?
Speaker 1: And and how the consumer is doing? Yeah, I mean
Speaker 1: the consumer um, you know, based on what we've seen globally,
Speaker 1: you know, is still UM supporting obviously prestige beauty. I
Speaker 1: mean our our sales, you know, are are recovering UM,
Speaker 1: you know, every every month, every every quarter. Certainly we
Speaker 1: just reported our our second quarter results UM and we
Speaker 1: return to growth UM for uh, you know, a quarter
Speaker 1: earlier than what we had expected. UM. But the consumer
Speaker 1: is uh, you know, is gradually UM you know, coming
Speaker 1: back to I think spending UM in in the categories
Speaker 1: that that are important to to her, like beauty. How
Speaker 1: did consumer spending shift during the pandemic? Consumer UM spending
Speaker 1: shifted very much UM to online. First of all, so
Speaker 1: you know, we were one of the companies that um
Speaker 1: our our distribution was deemed to be non essential globally.
Speaker 1: You know, we sell only prestige beauty, so we sell
Speaker 1: in a lot of department stores and specialty stores UM
Speaker 1: which closed UM initially during during the pan eMMC UM
Speaker 1: and then reopened. But you know, traffic has been been
Speaker 1: a bit light UM and has gradually been building. So
Speaker 1: we saw a tremendous shift to online and we were
Speaker 1: prepared for that, you know, with our own brand dot
Speaker 1: com sites UM, with our retail partners and UH and
Speaker 1: their sites as well as some of the platforms in
Speaker 1: pure play UM sites that that we sell on UM.
Speaker 1: We saw a tremendous UM you know, UH shift to
Speaker 1: UM to looking for her favorite skin care products, whether
Speaker 1: it's Lamaire or Clinique or or Essay Lauder UM or
Speaker 1: some of the other skincare brands that we UH that
Speaker 1: we have. We also saw UM a pick up in
Speaker 1: fragrance UM and again no surprise, more people working from
Speaker 1: home people um were Um, we saw our our bath
Speaker 1: and body category grow as well as our home fragrance
Speaker 1: category grow. UM. So you know, those are are some
Speaker 1: of the trends that we have observed during the pandemic.
Speaker 1: Makeup has been the most impacted, no surprise given given
Speaker 1: the fact that you know, many people are working from home,
Speaker 1: and those that are going out many are wearing masks
Speaker 1: as uh, you know, as instructed, and so that does
Speaker 1: have an impact on particularly the largest categories of makeup,
Speaker 1: foundation and lips. UM. And those are categories that we expect,
Speaker 1: certainly as the vaccine rollout um, you know continues to progress,
Speaker 1: uh and uh, and we start to see people migrating
Speaker 1: back to work and back to school and resuming some
Speaker 1: of their social activities. UM, we expect to you know,
Speaker 1: to have a strong, strong makeup recovery at that point
Speaker 1: in time. Tracey, I feel like you've described me. I
Speaker 1: spent so much more on skincare uh in the last
Speaker 1: year or so. UM then then you know, certainly on
Speaker 1: you know, traditional makeup. And it's just very interesting you
Speaker 1: talked about though, you know, shifting to online and I
Speaker 1: do wonder we've seen just an increased digitization shin of
Speaker 1: our world when it comes to retail, not just you guys,
Speaker 1: but everybody. And you know, folks that had strategies that
Speaker 1: maybe they were going to roll out over the you know,
Speaker 1: next three to five years, all of a sudden did
Speaker 1: them overnight? What has changed in terms of your digital
Speaker 1: strategy specifically because of the pandemic and just you know,
Speaker 1: seeing how this is how an increasing number of consumers
Speaker 1: want to shop. Well, we had a very strong UM
Speaker 1: focus on on online for for many years. Actually we
Speaker 1: started our online sites more than more than twenty years
Speaker 1: ago UM, and we were focused at was our fastest
Speaker 1: growing channel heading into the pandemic. What we've seen is
Speaker 1: an acceleration of the penetration of of online. Certainly, more consumers,
Speaker 1: a lot of new consumers that we had not m
Speaker 1: seen purchase online previously started to purchase online. Obviously when
Speaker 1: when UM, brick and mortar, UM, you know, became less
Speaker 1: less attractive to to shop in UM during this pandemic.
Speaker 1: And so we expect that we're going to continue to
Speaker 1: see those those trends coming coming out of the pandemic. Clearly,
Speaker 1: we expect that consumers will return to brick and mortar,
Speaker 1: but those that you know have developed the habit of
Speaker 1: shopping online, we expect will continue. And we have added
Speaker 1: quite a bit of functionality to our online site that
Speaker 1: have many of our retail partners. We've added virtual try
Speaker 1: on in terms of makeup UM, we have a virtual
Speaker 1: diagnostic for our clinique brand UM. We have live streaming events.
Speaker 1: We've added a lot more video content and how too,
Speaker 1: and we've actually seen which is one of our encouraging
Speaker 1: signs for makeup, We've seen more consumers actually access those
Speaker 1: videos and uh UM you know, with an interest in
Speaker 1: learning more about skincare treatments as well as UH as
Speaker 1: well as makeup treatments as well. This is this is
Speaker 1: a business where people like to try before they buy UM,
Speaker 1: and you know they do that in person in stores.
Speaker 1: I'm wondering how the person experience is going to change
Speaker 1: on the other side of this pandemic. We think that
Speaker 1: you know, again, uh you know, we have tried to
Speaker 1: add as much consultation to our online sites as as possible,
Speaker 1: but we also know that people miss that human interaction
Speaker 1: UM and that ability to actually buy now, get now,
Speaker 1: and so that's something that you know, certainly an in
Speaker 1: store experience provides an addition to as as you mentioned,
Speaker 1: being able to physically physically try on product. You know,
Speaker 1: we have sanitary practices at you know, all of our
Speaker 1: counters and in our freestanding stores. UM. So you know,
Speaker 1: as consumers return, you know, we are are making sure
Speaker 1: that UM, that they can try comfortably. And and you know,
Speaker 1: in terms of the behavior's post post pandemic, you know,
Speaker 1: we do expect that. You know, we ended last year
Speaker 1: with our online business UM. You know at a twenty penetration.
Speaker 1: You know, we certainly expect grow from from there going forward. UM.
Speaker 1: And that was quite a step up from you know,
Speaker 1: from fiscal fiscal nineteen UM. So again you know, we
Speaker 1: are prepared prepared for that. At the same time, though,
Speaker 1: we do expect that people will come back to UM,
Speaker 1: to brick and mortar to try to be able to
Speaker 1: try and buy products you know, UM at the same time, UM,
Speaker 1: and that's some of the benefits of brick and mortar,
Speaker 1: and and certainly UM the physical interaction that that you know,
Speaker 1: so many people crazy these days by by by not
Speaker 1: having as much as they protect themselves during this pandemic. UM,
Speaker 1: we think will resume as well, well, and I'm gonna say,
Speaker 1: you know, I tend to buy more when I'm playing
Speaker 1: with the product. You know, you just that's the way
Speaker 1: it is. And I have to say, full disclosure, I
Speaker 1: had an aunt who was an sty Lotter rep for
Speaker 1: many many years in Houston. Um, you know that whole
Speaker 1: face to face and she's what got my family kind
Speaker 1: of started on all the different Esty Lotter brands, whether
Speaker 1: it's prescriptives, whether it was origins, you know, you name it. Um.
Speaker 1: But I'm just curious just to push the point, you know,
Speaker 1: increasely a younger generation. I've got a teenager, she goes
Speaker 1: to Sephora, Like that's where she's going. How do you
Speaker 1: guys continue to move forward where you're known for your
Speaker 1: counters um, And that's a big part of the story,
Speaker 1: but how do you start to embrace you know, increasingly
Speaker 1: the Sephora model. Yeah, no, we we actually have a
Speaker 1: very strong relationship with Sephora globally, so we have, um,
Speaker 1: you know a number of our brands, I think right
Speaker 1: now around seventeen or eighteen of our brands currently in
Speaker 1: Sepphora right now. Um, we have a strong presence as well. Um,
Speaker 1: you know with with Sephora Online and the same with
Speaker 1: with Ultra and Douglass and many other specialty retailers. So
Speaker 1: we have, you know, throughout the course of the last
Speaker 1: UM you know, the last five to seven years, really
Speaker 1: expanded our penetration in in specialty MULTI because the department
Speaker 1: store channel, our historical channel of distribution, obviously has seen
Speaker 1: competition from other channels, including online UM. So it's been
Speaker 1: important for us to be able to diversify our channel
Speaker 1: MIXED to be present in those other channels where to
Speaker 1: your point, younger consumers UM and other consumers as well
Speaker 1: are increasingly UM shopping at least part of their shopping
Speaker 1: experience annually or or all of your shopping experience. So
Speaker 1: so we feel very good about, you know, how how
Speaker 1: we have broadened the diversification of our channels UM to
Speaker 1: be able to reach other consumers and again online obviously
Speaker 1: being a ubiquitous UM you know too and available to everyone.
Speaker 1: We we talked about consumer shifts during the pandemic and
Speaker 1: the different way that you are expecting consumers to behave
Speaker 1: post pandemic, what trends will stick. But I'm wondering about
Speaker 1: about your own employees and what you're seeing from your
Speaker 1: own employees, specifically when it comes to working from home,
Speaker 1: how potentially you have to make real estate adjustments at
Speaker 1: corporate headquarters and other offices throughout the world because of
Speaker 1: this new normal. What are you doing? Yeah, well we
Speaker 1: so we do have UM a number of our employees
Speaker 1: to your points that have been working from home, UM,
Speaker 1: at least in the US now almost a year. UM.
Speaker 1: So we're coming up on the one year anniversary of
Speaker 1: of of working from home here in the US, and
Speaker 1: we've already passed that universe of that anniversary in in
Speaker 1: some of our other markets. So UM, we have many
Speaker 1: of our offices opened for UM UM for those who
Speaker 1: want to come into the office. UM. But most people
Speaker 1: are are working are working from home, and we are
Speaker 1: in the process now of determining UM for a whole
Speaker 1: variety of reasons, UM, you know, a more flexible working
Speaker 1: model for when when people do start to transition more
Speaker 1: permanently back back to the office. UM. And we do
Speaker 1: expect that, you know. And UH, and we announced that
Speaker 1: we actually have given up some of our office space
Speaker 1: that we had committed to here in UM in Manhattan, UM,
Speaker 1: because you know, we are looking at more of a
Speaker 1: hybrid model going going forward. That does a couple of
Speaker 1: things for for us, you know, as we think about
Speaker 1: the pandemic and the impact that it's had, you know
Speaker 1: on our you know, our workforce. You know, our workforces
Speaker 1: percent female. We have a lot of young mothers in
Speaker 1: our workforce that have really struggled UM during during this
Speaker 1: time frame to work from home, UM, take care of
Speaker 1: the household, take care of kids, elder care, etcetera. UM.
Speaker 1: The ability to be able to offer more flexible um
Speaker 1: UM working arrangements UM you know, depending on on the
Speaker 1: position UM will be you know, will be very important
Speaker 1: for for us going going forward. And many of our
Speaker 1: policies in the company are are very much here towards
Speaker 1: families and supporting families. Given given the high penetration that
Speaker 1: we have of female workers. We have you know, twenty
Speaker 1: weeks of paid you know, parentally, we have another six
Speaker 1: weeks of back to work flex stability UM. You know,
Speaker 1: during the pandemic, we did expand childcare and elder care
Speaker 1: benefits UM. You know, we again are trying to support
Speaker 1: more flexible work work environments. We have UM expanded our
Speaker 1: employee assistance recognizing the amount of stress that that people
Speaker 1: are are under so UM so we do, you know,
Speaker 1: certainly are taking some of the lessons from this pandemic
Speaker 1: and UH and going forward looking at how we can
Speaker 1: UM you know, UM continue to implement some of some
Speaker 1: of the policies that we think will be beneficial going
Speaker 1: forward to our employees learning learning as as we go.
Speaker 1: There are a lot of companies experimenting with more flexible
Speaker 1: ways for their employees to work. And at the same time,
Speaker 1: we hear stories from Silicon Valley about people relocating to
Speaker 1: potentially less expensive areas and and perhaps they're pay being cut.
Speaker 1: Are you thinking about changing compensation at all based on
Speaker 1: where an employee lives or or if they're coming into
Speaker 1: the office. We have not had that conversation yet. Now,
Speaker 1: you know, we do expect that our office footprint will
Speaker 1: remain will remain the same, UM, you know, in terms
Speaker 1: of where our you know, the majority of our footprint
Speaker 1: is in our various markets. So talk to us a
Speaker 1: little bit more about the programs that you guys have
Speaker 1: at s D latter. I think I love the statue
Speaker 1: teld Us Tracy that you know of your workforce is female.
Speaker 1: That's just not typical if you go around corporate America.
Speaker 1: But it kind of warms my heart to hear that
Speaker 1: you guys have recently created an equity and engagement center
Speaker 1: for Excellence and it's you know, equity and representative representations
Speaker 1: within every aspect of your business. It's very holistic. You know,
Speaker 1: how are you doing this? Yeah, so we we UM
Speaker 1: and thank you for the question. We announced this about
Speaker 1: a week ago. UM. You know, we've always been a
Speaker 1: company that has been committed to inclusion and UM and diversity.
Speaker 1: And as we think about the events of the last
Speaker 1: year or so, in addition to the pandemic UM, you
Speaker 1: know again the impact that has had on on women, UM,
Speaker 1: some of them you know, racial inequities that that certainly
Speaker 1: have UM you know come to fruition UM and UH
Speaker 1: enlightened and some of the commitments that we made last
Speaker 1: year UM to racial equity commitments. You know it it
Speaker 1: is it is time, certainly for us to think about
Speaker 1: how do we evolve you know, some of our very
Speaker 1: good practices UH and deepen some of the commitments that
Speaker 1: were we've made, UM, you know going forward. And so
Speaker 1: you know, our you know, our our newest center of
Speaker 1: Excellence is really geared to do that Equity and Engagement
Speaker 1: really work with you know, our our HR executives, all
Speaker 1: of our executives across the company to make sure that
Speaker 1: we are UM providing leadership and development programs UM for
Speaker 1: all employees, but certainly UM you know some that are
Speaker 1: specifically geared towards women and their and their special special
Speaker 1: needs UM making sure that you know our UM you know,
Speaker 1: our HR programs are really focused on making sure that
Speaker 1: we are equitable in providing opportunities equally for all of
Speaker 1: employees who are you know, UM UM ready for that
Speaker 1: next chapter in their career. So UM, it's very exciting
Speaker 1: from from a company standpoint. We have a wonderful leader
Speaker 1: of our equity and engagement THEOE Nicole Munson, who who
Speaker 1: has been with the company for for some time in
Speaker 1: our legal department and UH and has transitioned over to
Speaker 1: to leave this effort UM and are very excited about
Speaker 1: about this being another chapter in our you know, evolution
Speaker 1: UM to have a more equitable workplace. We're talking with
Speaker 1: Tracy Travis, she's executive vice president of Finance and chief
Speaker 1: financial officer to St. Lauder with us on the phone
Speaker 1: in New York City. Tracy, UM, we have had a
Speaker 1: lot of these conversations about inequities, equality. Uh, it's not
Speaker 1: just any one subject. Do you know that, I know
Speaker 1: that Tim knows that. UM. How do we really move
Speaker 1: the needle? Yeah? I mean I I think I think, UM,
Speaker 1: some of the things that are happening right now and
Speaker 1: some of the push that's happening in terms of greater
Speaker 1: transparency and accountability UM is one way where we move
Speaker 1: the needle. UM. So companies are you know, UM uh
Speaker 1: providing UM and being you know, certainly UM asked to
Speaker 1: provide more transparency on you know, gender pay equity. UM.
Speaker 1: We've committed to to reach equity by UM. You know,
Speaker 1: we have almost gender parity right now on our board
Speaker 1: of directors UM, and we are committed to achieving and
Speaker 1: maintaining that by UM. You know we've made Why does
Speaker 1: it take? So it's not to you guys specifically, but
Speaker 1: I do feel like when we have people put out
Speaker 1: projections in general, it feels like everything always takes so long.
Speaker 1: Why is that? Well, I would say, right now, if
Speaker 1: you think about the current business environment, you know, we're
Speaker 1: not doing a lot of hiring right now, and and
Speaker 1: also from a board perspective, it's a matter of obviously
Speaker 1: retirement on on boards to make make room for you know,
Speaker 1: uh for some of these um uh, some of these
Speaker 1: strategies to to be able to take hold. So well,
Speaker 1: you know, one of the things that we are known
Speaker 1: for as a company is you know, uh, um, when
Speaker 1: we set a goal for ourselves, we strive to um
Speaker 1: to beat that goal. And so I'm you know, fairly
Speaker 1: comfortable that um, given given some of the goals that
Speaker 1: we've put in place, we will certainly strive to two
Speaker 1: more than than achieve them. But I mean, right now,
Speaker 1: they're you know, there's not a lot of companies that
Speaker 1: are doing with the exception of probably tech companies you
Speaker 1: know that are doing a lot of hiring. So that
Speaker 1: is taken into consideration when some of these timeframes are
Speaker 1: are established, and no one, no one wants to miss
Speaker 1: you know what, no one wants to to miss a goal.
Speaker 1: But the great thing is, Carol, that you know, you know,
Speaker 1: we are being held accountable, being accountable by our employees,
Speaker 1: We're being held accountable by our board, our you know,
Speaker 1: our CEO, our executive chairman, UM, and our consumers and investors.
Speaker 1: And so you know that is I think a different
Speaker 1: environment um than has you know, existed previously. And as
Speaker 1: a result of that, I think, you know, we are
Speaker 1: going to see I'm optimistic that we're going to see
Speaker 1: more progress in these areas. But it has taken a
Speaker 1: bit of a reckoning. Yeah right, point, hasn't it? Yeah? Absolutely?
Speaker 1: But I think what you said accountability. Listen, Tim, and
Speaker 1: I he s hearded me said a million times. I
Speaker 1: say it to my teenage daughter. You know, accountability, accountability
Speaker 1: for actions like we all have to live by that,
Speaker 1: and I think that's what ultimately brings about change. Tracy,
Speaker 1: thank you so much. What a great deep dive, and
Speaker 1: really appreciate all the time that you gave us today.
Speaker 1: Tracy Travis, she's executive vice president of finance and chief
Speaker 1: financial officer at st. Lauer. Am the phone in New
Speaker 1: York City, Marco Journal. Yeah but you let me drive? No, no, no,
Speaker 1: all night please, I'll do the riding drivel let me.
Speaker 1: I want to drive, Just drive baby, question dry this
Speaker 1: is the drive to the globe. Give me thanks. We'll
Speaker 1: drying us on Bloomberg Radio. All right, everybody, just about
Speaker 1: eleven minutes left in today's trading session. Time for the
Speaker 1: drive to the close. Back with Us is Hillary Kramer,
Speaker 1: President and chief investment Officered Angie Capital Research, author of
Speaker 1: Game Changer Investing Back with us on the phone in
Speaker 1: New York City. How are you very good, Carol on
Speaker 1: Women's International Day? Yes, exactly, nice to have you here. Hey,
Speaker 1: Tim actually brought to my attention, So I'm just gonna
Speaker 1: go right there. One of the gets the most read
Speaker 1: story in the Blomberg in the past hour, and it
Speaker 1: talks about how the Nazark one and the Dow Jones
Speaker 1: Industrial average diverging the most since what does that say
Speaker 1: to you? Does it make sense to me? Part of
Speaker 1: it makes sense to me that I think allow those
Speaker 1: tech names as big momentum plays are seeing a little
Speaker 1: bit of a reflation trade. But how do you see it?
Speaker 1: The the higher rates that you as treasury ten year
Speaker 1: bond absolutely dictates the price and valuation of the nastec stocks.
Speaker 1: We take it. It's like pure fundamentals, it's like financial theory.
Speaker 1: We we value these companies based on how they're going
Speaker 1: to do in the future, and when we look at
Speaker 1: these big tech names, we're looking all the way out
Speaker 1: and it just makes evaluation that much lower today. That's
Speaker 1: what's happening there also people are people are trading today,
Speaker 1: and I say people, not just investors, everyone, they're in
Speaker 1: the market. They're rotating, they're they're like trying to like
Speaker 1: like their tails, so to speak. So suddenly, you know,
Speaker 1: check it out. And and the realization has come that
Speaker 1: there's some really solid companies that people left for dead
Speaker 1: for how long did I talk about Goldman's Acts or
Speaker 1: Valveoline or older Public Insurance. Now these are getting fully valued.
Speaker 1: So we need to be really careful. Don't think that
Speaker 1: you can't get hurt, you know. On the other side,
Speaker 1: and what Charlie said before, it is a tale of
Speaker 1: two of two uh two tapes, very much so because
Speaker 1: there's so much, so much selling going on. And uh
Speaker 1: but I think the electric vehicle space has also been
Speaker 1: hurt really bad. You know, those hot new areas, that
Speaker 1: thing you know, kind of crashed and burns very quickly.
Speaker 1: But it will come back. It'll have lots of iterations,
Speaker 1: will be lots of microvisions and discers fsrs to come
Speaker 1: and neo's But anyone who's trying to do well on
Speaker 1: those it's not working. And that's why also we've seen
Speaker 1: this this rotation now also energy stocks. Of course, that's
Speaker 1: the other reason, right, the price of oil starts to
Speaker 1: rise and the value of the dollar has dropped. I
Speaker 1: don't recommend anyone runs out and gets their X and
Speaker 1: I'm happy it's that a fifty two weeks day, fifty
Speaker 1: two high today for all of you have been holding
Speaker 1: it for you know, the last fifty years. Uh, but
Speaker 1: it's really it's really a time to be really careful
Speaker 1: and find the right stocks. You know, something like big Lots,
Speaker 1: which I loved at ten dollars and seventeen and twenty,
Speaker 1: you know, up at seventy dollars. It's sort of like
Speaker 1: a five and five below with Raymar and Flannigan mixed
Speaker 1: in with furniture. You know, think about it. This is
Speaker 1: a stock that schooling not six hundred percent, so um
Speaker 1: like we're looking we're we're we're rotated to we're looking
Speaker 1: at companies still like ingredient that really hasn't caught on yet.
Speaker 1: That's the old corn products. It was in the original
Speaker 1: Tao list Um and an ingredient, you know, with that
Speaker 1: dividend yield and with the fact that the stock really
Speaker 1: came down with expectations that the institutional food service business,
Speaker 1: arena's stadiums was dropping ingredient makes all this, all the sugars, starches,
Speaker 1: corn syrups, it's all the cliff bars and French fries
Speaker 1: and hug and dust. I never imagine. So we'd like
Speaker 1: to company like I N g R. We think that
Speaker 1: that still has some room to grow. So you're ready
Speaker 1: to do the post pandemic trade here? Oh yeah, absolutely,
Speaker 1: even if we retrace. Remember, like we always talk about
Speaker 1: the insecurity, the unknown. The stock market hates the unknown.
Speaker 1: Even if we have a variant that comes into play
Speaker 1: and we see the numbers start to rise and coronavirus,
Speaker 1: there's a feeling, there's a sentiment nationally, other places much
Speaker 1: more than others. Certainly New York City is more conservative
Speaker 1: and concerned and modest in their approach. But we can
Speaker 1: handle it. We can handle it. And it's not just
Speaker 1: a vaccine the drugs coming out. If you do who
Speaker 1: ked it? You know the masks are working hard and
Speaker 1: ever you want to pull it. If we're all looking
Speaker 1: towards the future. Hilary, speaking speaking of that, J and
Speaker 1: J is a company that's that's on your list. What's
Speaker 1: a feeling to you about about J and J. They've
Speaker 1: come back in. The stock was depressed, had the overhang
Speaker 1: with the liability, with the lawsuits, the pether powder right exactly,
Speaker 1: that bave powder that really kept a lot of investors
Speaker 1: out in the big institutions today, um with all the
Speaker 1: focus on E, S G and being socially responsible, a
Speaker 1: lot of those kinds of companies because the way these
Speaker 1: companies have to be rated, like a Johnson and Johnson
Speaker 1: when they have a liability and a and a legal
Speaker 1: action against them, don't get bought. We're gonna see more
Speaker 1: and more of this as this regulation comes in with
Speaker 1: s G, but J and J with the vaccine, people
Speaker 1: are starting to see it, understand what they do the
Speaker 1: same way I think is going to happen with Bristol
Speaker 1: Meyers at six feet now Goldman facts, I'm with them.
Speaker 1: They see I've seen between d dollars targets that they
Speaker 1: have on you know, three point two percentivity yield. And
Speaker 1: it's because no one's paying attention to Bristol Myers, b
Speaker 1: M Y what celgene and that hotest louis here about
Speaker 1: and Revelman and Eloquis, you know, all of those are
Speaker 1: Bristol Meyer drugs so right, it's a reminder to look
Speaker 1: at kind of what's going on more broadly and look
Speaker 1: at companies that are making fundamental decisions or are taking
Speaker 1: actions that will affect their revenue streams going forward in
Speaker 1: their earnings potential. And you know, Jane j like I
Speaker 1: think about those companies that have come up with a vaccine.
Speaker 1: I mean, this isn't a one year thing. This is
Speaker 1: multiple years. Right, We're expecting to have to take this
Speaker 1: vaccine probably every year. And just got about forty seconds, okay,
Speaker 1: And that's why a company like Sonofi, also S and YU,
Speaker 1: the J and G of j and J of France.
Speaker 1: But they've been doing vaccines all over the world. They
Speaker 1: have there in the top twenty vaccine vaccines. Those companies
Speaker 1: will come into focus. Just everyone should be really careful
Speaker 1: about jumping into the United Airlines and even the Disney.
Speaker 1: You know, at this point there's still on the opening
Speaker 1: up for Kid Team percent capacity in Los Angeles. It's
Speaker 1: a great story. It's really Disney plus story picture. Everyone
Speaker 1: be careful, keep your powder dry. You haven't seen anything yet. Yeah,
Speaker 1: I gotta say, shares a Disney up almost seven percent today,
Speaker 1: you know, everybody Mickey Minnie. Everybody's excited about reopening the Kingdom.
Speaker 1: Hillary be Well, good to check in with you. Hillary
Speaker 1: Kramer over at A and G Capital Research. I mean,
Speaker 1: you could just feel people are just like, alright, let's
Speaker 1: do it. Look on Twitter on Instagram over the weekend,
Speaker 1: I saw people were doing the movie theater thing here
Speaker 1: in New York City. They were getting back there. I'm
Speaker 1: not ready for that. I'm not either, but I'm not
Speaker 1: vaccinated yet. Maybe I'll feel differently when i'm vaccinated. You're right.
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